Leaders of disruptive innovation … what the leaders of the world’s most innovative companies actually do

August 27, 2017

We are live in an age of disruption, of relentless change and uncertainty. The scale of the challenges we face and the accelerating speed of innovation demands a new approach to innovation leadership, a new way of fostering counter-intuitive ideas, forcing improbable insights and opening minds to uncomfortable solutions.

At first glance, leadership’s goals don’t seem to line up with dictionary definitions of disruption:

disrupt: (verb dis·rupt \dis-ˈrəpt\) to cause (something) to be unable to continue in the normal way; to interrupt the normal progress or activity of (something)

Surely leaders should do the reverse, providing a steady hand on the tiller and guiding their teams to consistent and predictable victories–right? That’s been the formula for organizational success for decades, at any rate. Not any more. For all the buzzworthiness of the term “disruption,” the fact is that the competitive pressure to innovate and shake up established markets is too powerful for companies (and the people who lead them) to disregard. And that’s having ramifications in the day-to-day experiences of most workplaces. If their leaders don’t shake organizations from their slumber from within, they’ll struggle to compete in the wider world.

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Corporate graveyards are littered with examples of companies that woke up to smell the coffee a little too late–Blockbuster, Blackberry, and Kodak, to name but a few. That’s rarely ever the fault of employees; the impetus to think disruptively must come from the top.

As an ad for Babson College’s MBA program noted back in 2011–before going on to be widely recited throughout the business world–some 40% of Fortune 500 companies in 2000 no longer existed by 2010. That rate of extinction hasn’t let up. Leaders have to be continuously ready to challenge everything that they’ve held dear.

John Chambers, CEO of Cisco, famously said “disrupt or be disrupted“.

Still, disruptive leadership isn’t about change for the sake of change. It’s about integrating change into the modus operandi of the company – which, of course, is easier said than done. The truly disruptive leader doesn’t need to talk about disruption because it’s simply how they get things done.

In my book “Gamechangers” I categorise leaders as having either a disruptive or sustaining mindset, as the mental frame through which they approach business:

Distruptive mindset … they like change … they seek opportunities, they are visionary and proactive, strategic and intuitive, market and consumer-focused, assertive and empowering, they see failure as an adventure, and innovation as a route to future growth.

Sustaining mindset … they don’t like change … they seek perfection, they are focused and reactive, tactical and analytical, process and efficiency-focused, detailed and deliberate, they fear mistakes, and seek to optimise performance within the status quo.

Most managers have a sustaining mindset. They see change as an occasional discrete activity, before getting back to normal. In fact the difference is often symbolised by the use of the word “manager” who is head-down delivering today, and “leader” who is heads-up creating the future.

Faisal Hoque says in his new “Survive to Thrive – 27 Practices of Resilient Entrepreneurs, Innovators, And Leaders” that there are five ways the most dynamic leaders embrace disruption and radiate it through their entire organisations:

#1. THEY RELENTLESSLY PURSUE THE TRUTH

Not telling others what you can see with your own eyes is the first step towards an early grave. When the business environment shifts and the accustomed approaches stop working, the last thing any business needs is a leader who suggests everyone keep calm and carry on.

Disruptive leaders empathize with their teams and involve them in their thinking.

Disruptive leaders are always testing to make sure their companies’ strategies are still effective–and say so when they aren’t. The more rapidly changes take place, the more crucial it becomes for leaders to take all their employees with them on the journey. The truth sometimes hurts, but it’s often the shock of that truth that prods people into taking actions and making decisions they might not have contemplated otherwise.

#2. THEY GUIDE OTHERS THROUGH CHAOS

Leaders need to be comfortable with the reality that in the face of change, the future is often hazy. Then they need others to be equally comfortable with that. As a company enters uncharted waters, it can be daunting for everyone involved. This is where the old “steady hand on the tiller” idea of leadership still has some force–not to guide an organization along a familiar course during difficult times, but to keep the ship steady as it steers in a new direction.

A big piece of that is communication. Leaders need to cut through the press-release palaver about “exciting new opportunities” and explain in concrete, practical terms how the changes under way tie into the business’s objectives: What new moves is the company making, and how come? Disruptive leaders empathize with their teams and involve them in their thinking. Chaos with a final destination is somehow a little less chaotic, even if you can’t map out in advance every move that will take you there.

#3. THEY’RE DECISIVE

The guiding principle of a disruptive leader is decisiveness. Leading by consensus has its place in the business world, but you can’t focus-group your way to an effective new playbook when the landscape changes abruptly.

Even if some decisions involves the most basic of “gut feels,” disruptive leaders need to tell their teams precisely what they want, when, and why–then help them to make it happen. Waiting too long to weigh countervailing opinions can spell doom.

#4. THEY BREAK THE RULES AND WRITE NEW ONES — BUT ALWAYS EXPLAIN WHY

The word “normal” doesn’t exist in a disruptive leader’s vocabulary–once something has become normal, it’s probably obsolete. The market is constantly changing, and the aim is always to be at its forefront rather than floundering in its wake. Sometimes that means breaking the rules; indeed, disruptive leaders nurture a healthy skeptics of “best” practices.

If employees don’t know the current rules of the game, the organization can’t play by them as a team.

Still, a willingness to break the rules isn’t the same as cheering lawlessness. Embracing disruption means there’s always a new normal, and for as long as it lasts, it’s up to leaders to communicate what it is. If employees don’t know the current rules of the game, the organization can’t play by them as a team.

#5. THEY THRIVE ON UNCERTAINTY

Leading disruptive innovation means getting used to incredible levels of uncertainty. You never know how something will work until you try it. Modifying your assumptions and adapting your plans depending on your results is the standard practice of the most effective disruptive leaders.

But while such leaders might be called visionaries, they don’t have a crystal ball. There’s a certain method to the mayhem of navigating continuous changes, and disruptive leaders know that the key to success lies in using the insights from experimenting in order to chart a new direction.

Innovate and iterate. It doesn’t matter if you don’t understand what’s happened the first time your organization tries something new. If you keep your eyes and ears open, you’ll be better informed the second time. And who knows? By then things might have changed all over again.

Interviews

Dr David Ebsworth is Chairman of Verona Pharma

What are some of the unique challenges that leaders today face, and how should they address them?

Resources are much more limited in my industry today than before. Regulations cover nearly everything and are changing constantly. Currency fluctuations have a massive impact on international businesses. These issues can be addressed by developing and following a long-term vision for the business and building the capability in the organization to understand the strategy, know each unit’s role in delivering this strategy, and setting up processes which enable action, with a clear understanding of each unit’s freedom to act.

What are the three or four factors that are most critical to managing as a disruptive leader? How do you address each one?

Having a clear vision of the future — Requires long term focus on the key factors to deliver. Challenging employees to be better than they think possible — Supporting rebels and people with the commitment to deliver. Forgiving mistakes and learning from them — Requires clear examples to be credible.

In a recent insigniam executive sentiment study, 87% of executives said that innovation was critical to their continued competitive advantage, yet only 15% felt their organizations were well prepared to deliver the requisite innovation. In your opinion, why is there such a disparity?

The speed of business is accelerating. Most organizations thrive on what they have done well in the past. This difference creates the issue. Few organizations support and reward innovation in a clear way.

Can you quickly share some of your leadership challenges and how you addressed them?

When I started in my new job, most people believed our most advanced development project was too late and too expensive to develop. I identified the key success factors with a cross-functional team approach and challenged them to deal with the issues. A year was cut from the time, and cost reduced significantly. As a result, a partnership deal was possible, which delivered significant short-term revenue.

What have you done to create the conditions for sustained innovation in your enterprise?

Not enough! More process is needed and the support of the true innovators should be clearer to the whole team.

Murial Penicaud is GM of Human Resources, Danone

Why should leadership disrupt business-as-usual?

For me, being disruptive is precisely the difference between leadership and management. A manager motivates and brings together the teams. A leader embodies a vision and transforms business. Both are important, but if you really want to transform — and it is essential for a company to be able to transform — you need leadership.

What does a disruptive leader look like?

A disruptive leader catalyzes collective energy. He/she knows how to listen and is able to detect, to interpret weak signals. He/she is open minded and curious of everything. But most importantly, a disruptive leader has his/her own style. Being a leader has to do with your personality, not with a defined role. There is no recipe to be a good leader, you have to be yourself. You have to accept who you are and draw from your inner resources to really impact. Being who you are also means you

have to know the difference between being popular and able to draw others with you because you embody a vision. If you want to be a leader, you have to distance yourself from being popular, because when you see and anticipate things, when you move fast, when you face big transformations, you can be quite alone sometimes. But it doesn’t mean you have to stay alone! Someone that stays alone is a pioneer, not a leader.

What are some of the unique challenges that leaders today face, and how should they address them?

The speed at which businesses transform makes information more and more complex, situations more and more interdependent. It makes information all the more difficult to capture and integrate. We can’t think and act anymore as we used to do, using forecasts and perspectives to anticipate the future. In fact, we don’t know what the world will be in 10 years. Therefore, a leader cannot be just a visionary, he has to be the one who makes the future possible. Another challenge is the change in our collective culture and ways of working. In a world where the networks have an increasing role and the new generations at work are constantly interconnected, the traditional “vertical” management style will not work anymore.

What aspect of leadership surprised you? Is there anything that’s harder than you thought it would be? Is anything easier?

One of the things I discovered is that not everyone wants to be a leader. It really has to do with who you want to be. On the other hand, the easy aspect of leadership is that you only have to be yourself. Being a leader has much more to do with who you are than with what you do. I remember a speech I did once, and I had a standing ovation at the end. All I had done was talk about my experience as a woman and a leader! In my generation, women still tried to imitate men’s leadership. I feel that nowadays the context has evolved. It is much more conducive for women to express who they are. By being yourself, you accept who the others are. One of the things I love is discussing with leaders from other cultures, you have a genuine respect on both sides for who the other is, what his or her background is.

What is a leadership lesson you had to learn the hard way?

That nothing can ever be taken for granted. This is something I learned some years ago when I was working in a French minister’s cabinet. I had set up a disruptive program aimed at combating illiteracy. It was innovative, and the results were extremely positive. I thought that this program, being both innovative and successful, would be extended even though the political majority had changed. But the program’s expense caused the new minister to suppress it. What I learned from that is that you always have to keep in mind that things can change, and that no improvement is guaranteed to last forever.

Research

Google’s Big Think project did a large-scale survey of business executives in both small and large companies to understand what they think drives disruptive innovation and who is doing it most effectively.

Respondents most frequently cited an ability to experiment and fail fast as one of the most important tools or practices to achieving such change, making it the only choice to be cited by a majority of participants. Staff autonomy and product feedback using “the crowd” were the second and third most cited requirements, painting a picture of short development cycles, ground-up innovation, and rapid readjustment.

Which three of the following tools or practices do you think are most important in creating disruptive innovation?

When looking at disruptive innovation practices in their own organizations, respondents said that they were executing well on criteria that they deemed important, such as frequent reviews of key metrics (50%), staff autonomy (47%), and experimentation (36%). Fewer respondents said that their organizations were effectively using practices such as renting assets on demand (21%) and prizes and gamification (10%).

Which four of the following CEOs of young companies do you think are most effective in achieving disruptive innovation?

Eight of the 10 most cited CEOs creating disruptive innovation had some involvement in media businesses even if their core business model lay elsewhere. Examples included Amazon’s Jeff Bezos, Apple’s Tim Cook, and Starbucks’ Howard Schultz. Elon Musk, though, was respondents’ most popular choice, being named by half of respondents as one of the most innovative leaders in younger companies.

Which four of the following chief executives of more established companies do you think are most effective in achieving disruptive innovation?

Disruptive innovation requires an understanding of emerging trends and technologies. The highest percentage (23%) of respondents identified advances in prototyping, additive manufacturing, and nanomaterials as having the most disruptive impact on business in the next three years. Sensors and the Internet of Things came in second, with 21% of respondents citing those technologies as having the potential to be the most disruptive. While crowd feedback was ranked highly by respondents as key to disruptive innovation in other questions, only 9% of respondents cited crowdfunding and crowdsourcing as key to driving future disruption.

Which of the following technologies do you think will have the most disruptive impact on business in the next three years?

Which of the following practices do you think is most important in creating effective leadership?

More respondents (30%) cited “acting with integrity” as the most important factor for effective leadership. However, respondents often cited other factors. One in four cited “embracing challenges and overcoming obstacles” — a trait consistent with the focus on experimenting and failing fast seen as key for disruptive innovation. In addition, 22% saw creating a positive work environment as the most effective trait.

Finally, everyday life

of Elon Musk … he spends most of his time with the engineering teams of Tesla and SpaceX, also working on next generation AI projects … and says to be entrepreneurial, leaders need to be rigorous, adds high value to consumers, and typically spend 80-100 hours a week working!

of Richard Branson … on having fun … where Virgin staff have the tools to do what they need, they enjoy what they do, and then deliver a great service experience with a smile. So a leaders job is ultimately to make sure all the details are right … and “the company sings”.

of Brian Chesky ... the Airbnb founder on the reality of being responsible for millions of people staying in millions of other people’s homes – and the trust and safety issues – and then the regulation challenges, technological maintenance – it’s about everyday real, practical things in the real world.

of Jack Ma … the Chinese billionaire founder of Alibaba, and former English teacher, puts empowerment as the number one priority of a leader … “its like a ship riding the oceans – making sure its strong enough, and you know where you are going” … and wanting “my people to be better than I am”.

of Jeff Bezos … he says “every day is day 1 at Amazon” in order to have the mindset of a start up, looking forwards not back, with a limitless opportunities not trivial repetition, ready to create the future … (otherwise it becomes day 2 “which is stagnation, irrelevance and decline, and death”)